Dealing with my CC debt!

Hello everyone. Have used this forum many times in the past but decided to join for support and advice.

I currently have around £7800 in credit card debt. Earlier this year I consolidated the debt into one MBNA 0% balance transfer credit card (£7300) and my previous Virgin Money 0% credit card (£500). The reason I have two cards is because I didn't accurately calculate the balance transfer fee when consolidating, so I had to leave £500 of the debt in my Virgin card (which is frustrating but oh well!)

This is in addition to an £800 overdraft in my current HSBC account which I am consistently in after paying other things like rent/phone bill etc. I am very rarely "in the black" each month.

The debt has crept up over many years of spending "here and there". Charges to credit cards at the end of a month, holidays, and I also bought an engagement ring using my credit card earlier this year, so that has bumped it up quite a lot.

Basically, for years I have buried my head in the sand when it comes to spending. I really want to tackle this head on and avoid any unnecessary future debt, and also clear my current debt.

My current repayments are £75 per month to MBNA and £50 per month to Virgin. With my current income and current repayment plan, it would take around one year to clear the Virgin debt and a shocking eight years to clear the MBNA :(:(:(


At the moment my plan is:

Clear my £800 overdraft first. The credit card debt won't accumulate more interest in the 0% accounts so I think this is the best course of action in the first instance. I would ideally like to get rid of my overdraft when paid off as I feel I cannot trust myself with it! Thoughts?

After that, I'm not sure. To be honest the idea of paying credit card repayments for eight years with nothing to show for it is highly upsetting :( Would you recommend increasing the monthly repayments in order to pay off the debt quicker? Or would you recommend paying only the minimum repayments and making sure the debt always stays in a 0% interest card so I don't get more interest building up?

Are there any other options I should be considering here? A total of £8600 (both CC debt and overdraft combined) is an absolutely terrifying amount to me, now that I have finally confronted it.

Eager for any help, advice and support you can provide.

Thanks

Comments

  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320
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    Hello everyone. Have used this forum many times in the past but decided to join for support and advice.

    I currently have around £7800 in credit card debt. Earlier this year I consolidated the debt into one MBNA 0% balance transfer credit card (£7300) and my previous Virgin Money 0% credit card (£500). The reason I have two cards is because I didn't accurately calculate the balance transfer fee when consolidating, so I had to leave £500 of the debt in my Virgin card (which is frustrating but oh well!)

    This is in addition to an £800 overdraft in my current HSBC account which I am consistently in after paying other things like rent/phone bill etc. I am very rarely "in the black" each month.

    The debt has crept up over many years of spending "here and there". Charges to credit cards at the end of a month, holidays, and I also bought an engagement ring using my credit card earlier this year, so that has bumped it up quite a lot.

    Basically, for years I have buried my head in the sand when it comes to spending. I really want to tackle this head on and avoid any unnecessary future debt, and also clear my current debt.

    My current repayments are £75 per month to MBNA and £50 per month to Virgin. With my current income and current repayment plan, it would take around one year to clear the Virgin debt and a shocking eight years to clear the MBNA :(:(:(


    At the moment my plan is:

    Clear my £800 overdraft first. The credit card debt won't accumulate more interest in the 0% accounts so I think this is the best course of action in the first instance. I would ideally like to get rid of my overdraft when paid off as I feel I cannot trust myself with it! Thoughts? This would be a sensible first move, assuming the OD is costing you fees, or interest, or both.

    After that, I'm not sure. To be honest the idea of paying credit card repayments for eight years with nothing to show for it is highly upsetting :(Well, you have an engagement ring and some holiday snaps to show for it. Would you recommend increasing the monthly repayments in order to pay off the debt quicker? Or would you recommend paying only the minimum repayments and making sure the debt always stays in a 0% interest card so I don't get more interest building up? Pay as much as you can - unless you can pay money to a savings account that pays interest. In that case, pay the minimum each month, then use your savings to pay off the remainder just before the 0% deal expires. If you can switch the balance to another 0% card then great - but don't forget, you aren't guaranteed to be accepted, and there will usually be a balance transfer fee to factor in.

    Are there any other options I should be considering here? A total of £8600 (both CC debt and overdraft combined) is an absolutely terrifying amount to me, now that I have finally confronted it.

    Eager for any help, advice and support you can provide.

    Thanks


    My thoughts in bold above. Aside from that, head over to the debt-free wannabe board, post a statement of affairs, and let the good folk there suggest where you can make savings in your monthly outgoings. Then throw all savings towards the debt.
  • eskbanker
    eskbanker Posts: 29,932
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    Sounds like you're going about this the right way - it is indeed sensible to get after the overdraft as a priority as this will be hurting you the most with charges.

    And yes, increasing the monthly repayments in order to pay off the card debt quicker also makes sense - having accepted that you have a large debt then paying it off as quickly as possible is worth doing, so that you have less of a problem when the 0% deals run out.

    One other thing to consider is to post over on the debt-free wannabe board, and in particular a Statement Of Affairs that summarises your income and outgoings in a way that helps you identify how you can reduce costs and have more money available to throw at debt.
  • Thank you, both. I will try to get a SOA together soon and post it there. I feel ok about managing it but it's as if the reality has risen up and given me quite a scare.
  • Thank you, both. I will try to get a SOA together soon and post it there. I feel ok about managing it but it's as if the reality has risen up and given me quite a scare.
    I wish you all the best.
  • MEM62
    MEM62 Posts: 4,675
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    The positive thing in that you have the big CC debt on an interest-free arrangement. This will buy you some time to clear the OD and Virgin CC balance. Once these are cleared you should increase what you are paying towards the NBNA card.

    Of course nobody can predict how long into the future we will still be able to enjoy interest free balance transfers. So, although it currently gives you some breathing space without interest being added and therefore clear more of the balance, it would be prudent to clear what you can as soon as you can in case these circumstances change.

    As for "paying credit card repayments for eight years with nothing to show for it" being highly upsetting, you might want to remind yourself that you have had the benefit / enjoyment of that spending but it was in the past. You spent money that you did not have at the time and have already had the "to show for it" and now you have to settle the bill.
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